Consumer Rights Bill

Sammy Wilson Excerpts

Tuesday 28th January 2014 Commons Chamber

[Vince Cable]

Some of us find this a passionately interesting subject. The enthusiasm shows, I know. There is the ombudsman for the public sector. One could argue that the legislation will bring the private sector up to the same standards of scrutiny that we would expect when there are failures in public administration.

[Sammy Wilson (East Antrim) (DUP)]

I am extremely interested in what the Secretary of State has been saying, which is important for consumers throughout the United Kingdom. As some of the measures that he has been speaking about today are devolved to Northern Ireland, in the interests of consistency, how will he ensure that whatever is introduced in this House is also introduced in other parts of the UK where there is devolution?

[Vince Cable]

There have already been discussions with the Northern Ireland authorities, and we plan to introduce the same measures in Northern Ireland. There is agreement on the subject. I cannot say off the cuff where we are in relation to Scotland and Wales, but there are discussions with devolved authorities to try to ensure that this is widely applied. Everyone agrees that these are improvements and it would be desirable if everybody throughout the UK benefited from them.

--- Later in debate ---

[Vince Cable]

The hon. Gentleman is right that the safety aspects are dealt with separately. I was under the impression that the relevant law was tightened up several years ago. I am familiar with it because a colleague who formerly represented Richmond Park in the House had a family tragedy in circumstances similar to those that the hon. Gentleman describes. I understood that the regulations relating to defective electrical equipment had been tightened, but that is a specific point that we can check.

[Sammy Wilson]

With regard to the time it can take for products purchased from manufacturers based overseas to be returned, or the number of times someone may have to be called out to repair a product before it is fit for purpose, does the Bill set out a time scale within which repairs must be done, products must be replaced or money must be returned?

[Vince Cable]

As I tried to explain when describing the reforms relating to deficient goods, repairs must be done the first time round. If they cannot be done in a reasonable time, there will be cash compensation. Previously that was ambiguous and unsatisfactory. There will be either a repair or cash compensation, and that will be much clearer than it has been in the past.

Let me talk about the provisions in the Bill that relate to competition law and the role of private actions. Competition is good for growth and one of the pillars of a vibrant economy, so a key part of the work is tackling anti-competitive behaviour. The European Commission—I quoted some examples a few moments ago—has estimated that cartels can raise prices by between 20% and 35%. Despite the strong competition framework that the Government are putting in place, the Office of Fair Trading has shown that businesses believe that the current regime for private actions is too slow and costly. As a result, businesses and consumers rarely get redress when they have been harmed by anti-competitive behaviour. In 10 years, there has been only one collective action case in this country, and only one 10th of 1% of the consumers who were eligible signed up to it.

We have tried to strike a careful balance. We do not want an American-style system of prodigious and constant litigation, which would be costly and benefit only lawyers. None the less, we believe that there is some imbalance in the current system that needs to be redressed. We will try to discourage parties from engaging in costly court cases by encouraging alternative dispute resolution. We propose reforming the Competition Appeal Tribunal by introducing a fast-track regime so that small and medium-sized companies can get quicker and cheaper access.

For example, let us take a car garage that relies on spare parts from a large supplier that has started withholding supplies to drive up prices, showing cartel-type behaviour. Previously, the garage would have had to take costly legal action in the High Court, possibly bankrupting itself in the process—it is a small company up against a big one. Under the Bill, the garage could take the case to the Competition Appeal Tribunal, which could swiftly issue an injunction resulting in the supplier having to restart its supply.

We will also introduce an opt-out collective action regime for consumers and businesses that have been harmed by anti-competitive practice, with safeguards to ensure that cases are appropriate and merit that approach.